Rent growth has continued to slowly decline, but demand remains strong and vacancy rates have stayed low, Yardi Matrix says in their November national report. The report expects conditions to continue to be favorable, especially for multifamily.
“Coming out of the worst of the pandemic, the multifamily market experienced eight straight months of exceptionally high rent growth, with the average U.S. multifamily asking rent rising about $180 between March and October.
“A slowdown is inevitable, and it started in November, when the average asking rent rose ‘only’ $4. Even so, the market remains healthy,” Yardi Matrix writes in the report.
Highlights of the November report:
- Multifamily rents rose again in November, but only slightly, as the anticipated deceleration in rent growth finally appears to be taking hold. The average U.S. asking rent increased by $4 in November to a record-high $1,590.
- Nationally, asking rents were up 13.5 percent year-over-year in November, a slight increase over October.
- Demand continues to be extremely high, with the average U.S. occupancy rate of stabilized properties maintained at 96.1 percent in October, up 1.4 percent year-over-year.
- Also remaining hot is the single-family rental market, with rent growth up 14.7 percent year-over-year in November. Although the single-family rental market is more varied than multifamily, occupancy rates rose 0.6 percent nationally year-over-year through October.
Job growth and apartment supply were normally the primary economic indicators before the pandemic. However, many typical indicators of growth are now mixed, according to the report.
“The point isn’t that traditional measures of analyzing multifamily fundamentals are no longer relevant. Economic growth, cost, the regulatory environment and attractive lifestyle amenities will always be determinants of the demand for housing.
“That said, the disruption of the pandemic and social changes that it caused have created some nuances that shouldn’t be ignored when underwriting multifamily investments over the next few years,” Yardi Matrix says in the report.
About Yardi Matrix:
Yardi Matrix researches and reports on multifamily, office and self-storage properties across the United States, serving the needs of a variety of industry professionals. Yardi Matrix Multifamily provides accurate data on 18+ million units, covering more than 90 percent of the U.S. population. Contact the company at (480) 663-1149